Many technology people have problems with the political system. Just look at the problems that existed for how the politicians thought Obamacare should run, and the technical community’s view of the service.

February 7, 2014

Bitcoin’s Political Problem

If cryptocurrency is to succeed, its proponents need to acknowledge that it’s hard to divorce money from politics.

Money is always political. This is obvious enough when we argue about Federal Reserve policy in the United States, or who should next chair the interest rate-setting body. But for over 1,000 years, we have argued about the nature of our monetary systems and shifted between different ways of making payments. Seen in this historical context, Bitcoin and other cryptocurrencies are just the latest in a long line of challenges to prevailing technology—and to current political arrangements.

The dominant design of today’s monetary systems is based on a western European tradition that can be traced back to the silver denarius of Emperor Charlemagne and before to the organization of the Roman Empire. This design bases the amount and nature of money in the economy on an interaction between government policy and what private individuals want to hold. Continual political pressure and repeated technological opportunity have produced many changes to that basic model over the years. Bitcoin’s rise may result in another round of that process.

Data Centers need to exist within a countries political system. What happens in China and South America is different than how the USA and EU exist. And, one of the biggest differences beside geography is the political system that exists in those countries.